Guangzhou DongSong Energy Group Co., Ltd, the Chinese company developing the Sukulu comprehensive development project on the outskirts of Tororo town at the Uganda-Kenya border, is set to start manufacturing fertiliser this October, according to government officials.
The fertiliser manufacturing plant is one of the proposed mining projects in the Uganda-China Guangdong Free Zone of International Cooperation, overlooking the Osukuru hills. Earlier feasibility studies say the hills contain some 75 million tons of phosphorite, which is used to make fertiliser, 213 million tons of iron ore, 429 tons of niobium, and one million tons of rare earth minerals.
The Uganda-China Guangdong Free Zone of International Cooperation was flagged off on Thursday the minister of finance, Matia Kasaija, and the energy minister, Irene Muloni. The Sukulu project will manufacture fertiliser for both local consumption and export to neighbouring countries.
Guangzhou DongSong’s chief executive, Jane Guo said they will start with bio-organic fertilisers that have already been tried around the country on, among other crops, vegetables, rice and Irish potatoes.
She added that they will also start with the manufacture of steel-related materials from the vast iron ore reserves.
At least $620m (Shs2.2trillion) is expected to be invested in the project, making it Uganda’s biggest mining venture since the Kilembe copper and cobalt mines in Kasese district.
The money was mobilised from the Industrial and Commercial Bank of China (ICBC), part of the $60bn investment package in Africa that Chinese President Xi Jinping announced during the China-Africa Cooperation (FOCAC) Summit in South Africa in 2015.
Guangzhou DongSong Energy Group Company started feasibility studies for the Osukuru hills in 2012. A year later, it was awarded a 50-year mining license over an area spanning 265 square kilometers.
The company signed a memorandum of understanding with the government to establish the Sukulu Comprehensive Plant that will comprise a fertiliser manufacturing plant and a steel plant.
Mr Kasaija, the finance minister, promised government’s “total support” for the mining venture, which he said has the capacity to turn around the country’s fortunes.
Foreign direct investment in Uganda’s mining sector averaged Shs3trillion ($800m) at the end of 2016; $620m of that was by DongSong.
Mr Kasaija further urged the company “to ensure technology transfer” when the project starts for more tricke-down benefits like jobs and related industries.
Guangzhou Dongsong’s officials said the project is currently employing some 900 locals but the number will increase to 2,000 by next year, when the fertiliser plant is manufacturing at full capacity and the steel plant is up and running.